Following "Black Thursday", 38% of brokers, banks and fund managers said that they have or are considering switching Liquidity Providers.
The landscape of Liquidity providers and Prime of Prime brokerages has experienced dramatic shifts this year ever since the unprecedented action by the Swiss National Bank on January 15, 2015. The crisis highlighted the need for reliability and caused many players to examine the safety of their positions.
London-based Prime of Prime Broker, Sucden Financial, conducted extensive research among brokers, banks, fund managers and professional traders across the globe in order to find out how attitudes and priorities have changed since the SNB aftermath known in the industry as Black Thursday. Finance Magnates received exclusive access to the research's results (based on a survey with 256 responses conducted between May 14 and July 14, 2015) and to insights from Peter Brooks, co-head of e-FX at Sucden Financial, on the current market.
According to the research, post SNB, 38% of brokers, banks and fund managers who responded to the survey have or are considering switching Liquidity Providers (LPs). Brooks says that this confirms the general discussions that have recently been taking place with many firms, highlighting the massive industry adjustment that is taking place.
He further explained: "The first wave of brokers switching LPs was forced upon many as some brokers went out of business and many banks and Prime Brokers started cutting their client base. The PB and Bank cull still continues, but increasingly we have seen clients start to switch providers through their own choice. Sucden Financial has seen an influx of new clients, particularly large brokers, who have traditionally worked with a Prime Broker but now find the terms and requirements on offer to be unfavourable."
Depth and Costs
The number one reason in the survey for a broker having switched LP post-SNB was depth of liquidity, which at first can seem a little surprising. Brooks explained that from talking to clients it seems that post-SNB this factor could also be linked to execution issues, the fifth reason cited for switching LP.
As for his firm, Brooks says Sucden Financial has maintained its banking liquidity relationships and worked hard with the banks to ensure a high quality of execution. "Across Sucden Financial’s entire client base we have seen rejection rates fall from last year’s 1.8% to under 1% this year to date. For some of our largest retail broker clients, rejection rates have been as low as 0.1-0.3% this year."
Spreads have always been a key factor for clients when selecting a Liquidity Provider and continue to be so. In fact, after depth of liquidity, spreads are the main reason why a broker, bank or fund manager would currently seek to switch Liquidity Provider, according to the research.
There have been many reports about spreads widening post-SNB and there is much discussion in the market to back this up Brooks confirms. "After an initial widening, we have seen spreads at Sucden Financial tighten – and it is no coincidence that we have also seen our business grow," he added.
Interestingly, before SNB events potential new clients seldom asked Brooks for financials and always focused heavily on costs. Post-SNB he says, virtually all potential clients request audited financial information. "Putting safety and security of funds and business partnerships is now just as important as finding the best value LP to work with. This puts us in a very strong position because Sucden Financial is a highly diversified business, with a net worth of over $100 million," Brooks summarized.
The landscape of Liquidity providers and Prime of Prime brokerages has experienced dramatic shifts this year ever since the unprecedented action by the Swiss National Bank on January 15, 2015. The crisis highlighted the need for reliability and caused many players to examine the safety of their positions.
London-based Prime of Prime Broker, Sucden Financial, conducted extensive research among brokers, banks, fund managers and professional traders across the globe in order to find out how attitudes and priorities have changed since the SNB aftermath known in the industry as Black Thursday. Finance Magnates received exclusive access to the research's results (based on a survey with 256 responses conducted between May 14 and July 14, 2015) and to insights from Peter Brooks, co-head of e-FX at Sucden Financial, on the current market.
According to the research, post SNB, 38% of brokers, banks and fund managers who responded to the survey have or are considering switching Liquidity Providers (LPs). Brooks says that this confirms the general discussions that have recently been taking place with many firms, highlighting the massive industry adjustment that is taking place.
He further explained: "The first wave of brokers switching LPs was forced upon many as some brokers went out of business and many banks and Prime Brokers started cutting their client base. The PB and Bank cull still continues, but increasingly we have seen clients start to switch providers through their own choice. Sucden Financial has seen an influx of new clients, particularly large brokers, who have traditionally worked with a Prime Broker but now find the terms and requirements on offer to be unfavourable."
Depth and Costs
The number one reason in the survey for a broker having switched LP post-SNB was depth of liquidity, which at first can seem a little surprising. Brooks explained that from talking to clients it seems that post-SNB this factor could also be linked to execution issues, the fifth reason cited for switching LP.
As for his firm, Brooks says Sucden Financial has maintained its banking liquidity relationships and worked hard with the banks to ensure a high quality of execution. "Across Sucden Financial’s entire client base we have seen rejection rates fall from last year’s 1.8% to under 1% this year to date. For some of our largest retail broker clients, rejection rates have been as low as 0.1-0.3% this year."
Spreads have always been a key factor for clients when selecting a Liquidity Provider and continue to be so. In fact, after depth of liquidity, spreads are the main reason why a broker, bank or fund manager would currently seek to switch Liquidity Provider, according to the research.
There have been many reports about spreads widening post-SNB and there is much discussion in the market to back this up Brooks confirms. "After an initial widening, we have seen spreads at Sucden Financial tighten – and it is no coincidence that we have also seen our business grow," he added.
Interestingly, before SNB events potential new clients seldom asked Brooks for financials and always focused heavily on costs. Post-SNB he says, virtually all potential clients request audited financial information. "Putting safety and security of funds and business partnerships is now just as important as finding the best value LP to work with. This puts us in a very strong position because Sucden Financial is a highly diversified business, with a net worth of over $100 million," Brooks summarized.
EU Parliament Imposes €10,000 Cash Payment Limit in New Anti-money Laundering Legislation
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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